The Union Cabinet has approved a Bill to set up a Development Finance Institution (DFI) to generate funds for investment in the infrastructure sector.
The proposed legislation will give effect to the Budget announcement made by Union Finance Minister Nirmala Sitharaman on 1 February 2021.
The government has proposed Rs 20,000 crore to capitalise the institution.
The Cabinet has cleared this Bill through which it will have an institution and institutional arrangement, which will help in increasing long-term funds. The proposed DFI will have 50 percent non-official Directors.
In the Union Budget 2019-20, the Finance Minister had proposed a study for setting up DFIs for promoting infrastructure funding. Around 7,000 projects have been identified under the National Infrastructure Pipeline (NIP) with a projected investment of Rs 111 lakh crore during 2020-25.